Commonwealth Confidential

Gov. Rendell said he will sign a sharply scaled-back budget early next week that will allow most state employees to be paid - but will not provide billions in funding for education, health care and human services.

The governor stressed that his action is only a temporary solution to the state's budget impasse, which has now entered its fifth week. He said he still holds out hope that a permanent agreement on a spending plan can be found soon. A joint conference committee of House and Senate leaders is meeting today and over the next few days to try to hammer out a deal.

But if the committee makes little progress on reaching an agreement by early next week, Rendell said he will sign the temporary budget to keep essential government operations running.

"I want to make it clear, this is not a final budget," Rendell told reporters at a news conference in the Capitol this afternoon of the temporary measure he intends to sign next week. "This is a bridge. It is a very important bridge ... This is a way to get our state employees paid."

Roughly 77,000 state workers have received partial paychecks over the last two weeks, and the first batch of those employees are to have a "payless payday" this Friday. No payments to vendors have been made this month.

The deadline to pass a budget was July 1. Without an enacted spending plan, the state operates under a diminished capacity to spend money.

The temporary budget Rendell would sign next week would allow the majority of workers to get paid, as well as receive backpay, likely by the second week in August.

But that budget would not provide funding to schools, counties and hospitals, or grants for the arts or state fairs. Those funding questions would be addressed as the administration and the legislature continue negotiations on a final spending plan for the state.

The Rendell administration has been fighting with Republicans in the legislature for months over the best way to balance a budget in recessionary times.